Deserving Companies to draw benefits of ‘Startup India Action Plan’

In order to boost innovation, such companies should be engaged in development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property.Ruchika Chitravanshi | ET Bureau | February 22, 2016, 17:30 IST

The process of recognising a startup would be done through a mobile application/portal.NEW DELHI: The government has set out the definition of a ‘startup’ to ensure that only deserving companies draw the benefits of its ‘Startup India Action Plan’ and to “create a conducive environment for startups in India”.

As per a government notification, ‘startup’ companies would be required to have equity funding of at least 20% by any incubation, angel or private equity fund, an accelerator or angel network duly registered with the Securities and Exchange Board of India endorsing the innovative nature of the business. Such companies would fall under the category of startups up to five years from the date of incorporation as long as their turnover does not exceeded Rs 25 crore.

In order to boost innovation, such companies should be engaged in development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property.

The process of recognising a startup would be done through a mobile application/portal.

However, until the mobile application becomes operational, alternative arrangement will be made by the department of industrial policy and promotion (DIPP).

Prime Minister Narendra Modi launched the ‘Startup India’ initiative in January this year, announcing a string of incentives for startups to get greater access to capital, incubation and talent.

Modi announced a tax holiday and Inspector Raj-free regime forthree years, capital gains tax exemption and Rs 10,000 crore corpus for funding of startups. In order to reduce the regulatory burden on startups, the action plan also includes a self-certification scheme in respect of nine labour and environment laws, and says there will be no inspection during the first three years of launch of the venture. The government is also working on a legal support for fast-tracking patent examination at lower costs. It will promote awareness and adoption of Intellectual Property Rights (IPRs) by startups and help them protect and commercialise IPRs.